Spreadex Market Update

Renewed optimism over US covid-19 relief package sends Europe higher



At the start of a new month – and the final quarter of the year – the European markets took their cue from the Dow Jones last night, opening October with a solid rebound.

The source of growth appeared to be the ‘progress’ between Republicans and Democrats regarding a new covid-19 relief plan. Though Mitch McConnell warned that both sides are still ‘far apart’, reports state that Treasury Secretary Steven Mnuchin has proposed a deal worth $1.5 trillion – more than the GOP’s $1 trillion cap, and above the $1.4 trillion Trump was willing to offer, but well short of the $2.2 trillion plan unveiled by Nancy Pelosi and co. earlier in the week.

Unable to reach an agreement last night, the House vote has been delayed by a day, reportedly to give Pelosi and Mnuchin more time to try and come to a compromise on a stimulus package.

The renewed optimism regarding a deal led to a decent enough start in Europe, though the region did quickly pull back from its more explosive growth.

Up 0.7%, the FTSE’s gains were pretty much standard for Europe, sending the UK index back across 5900 having drifted below that level on Wednesday.

The CAC echoed the FTSE’s rise, climbing 0.8% to hit 4850. An outlier this Thursday, however, was the DAX, which missed out on the strides made by its peers as it fell by 0.2%.

As for the Dow Jones, it’s looking for a 250 point increase when the bell rings on Wall Street, one that would shoot it back past 28,000.

If a deal doesn’t materialise tonight, however, the markets could wakeup with a nasty hangover tomorrow morning.

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